Here’s the latest twist in the General Growth saga: Simon Property says it is weighing a higher bid for its smaller, bankrupt rival and could come up with something within a week.  That’s not surprising.

When General Growth investors Bill Ackman and Fairholme Capital Management stepped up with $3.3 billion of fresh capital to shore up a Brookfield Asset Management-backed plan, Simon lost the edge it had with unsecured creditors. The unsecured creditors stand to get cash under both plans now. And experts said it was too early for Simon to walk away from the game.

For now, Simon is trying to take away General Growth’s excuses for rebuffing its bid.

General Growth raised questions about Simon’s funding for a deal. So Simon said it is rallying support from Blackstone Group and sovereign wealth funds, and putting together a $6 billion credit line from JP Morgan.

General Growth asked if Simon would offer stock to General Growth’s equity owners. So Simon said it would be open to the bankrupt company doing due diligence on Simon to help it evaluate Simon’s equity.

Simon is also planning to structure any revised bid in a way that makes it directly comparable to the split company deal that General Growth has proposed. The idea is an apples-to-apples comparison will allow for negotiations on other substantive issues.

It is also urging General Growth to not give its backers warrants worth hundreds of millions of dollars, which would make it that much more expensive for Simon to buy the company.

It seems, then, that the fight for General Growth’s future still has some rounds left to go.

By news1

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